Hold Congress Accountable

Knowledge is power. It makes sure people understand what is happening to their country, and how they can make a difference. FreedomWorks University will give you the tools to understand economics, the workings of government, the history of the American legal system, and the most important debates facing our nation today. Enroll in FreedomWorks University today!

Blog

Counter Terrorism and Illicit Finance Act is Garbage

Members of Congress love tunefully titling bills to hide massive government expansion. A great example is the Counter Terrorism and Illicit Finance Act, a gross privacy violation that would authorize bureaucratic snooping through private financial records.

This awful bill is similar to a proposal defeated last year, on which conspiratorial Senator Sheldon Whitehouse (D-R.I.) and other gormless Democrats piggybacked their opposition to the Citizens United v FEC Supreme Court ruling. Their support for the Counter Terrorism and Illicit Finance Act is to reveal corporate ownership to the public for tracing so-called “dark money” donations. Here’s what it does.

The Counter Terrorism and Illicit Finance Act erodes due process and privacy by expanding the scope of Section 314 of the Patriot Act, which authorizes financial institutions to monitor for terrorist and money laundering activities occurring among customer transactions. If an institution detects suspicious behavior, it alerts the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) by issuing a suspicious activity report. A suspicious activity report allows FinCEN to open an investigation and acquire all of a customer’s financial records. From there, a FinCEN investigation may lead to filing charges, freezing a customer’s assets, or alerting other financial institutions about suspicious transactions.

While this system is likely unconstitutional seeing that it authorizes warrantless information seizure, it would get worse under the Counter Terrorism and Illicit Finance Act. Financial institutions would scan customer transactions for over 100 domestic crimes, many of which have nothing to do with financial transactions, money laundering, or terrorism. The result would be FinCEN gaining access to thousands of business and individual transaction records currently protected by the Fourth Amendment. This is surveillance by a new name, under which law-abiding businesses would be easily prone to service denials and asset freezes.

Additionally, the Counter Terrorism and Illicit Finance Act scraps and mangles a clear cut process for establishing a corporation or limited liability corporation. The bill would require corporate applicants to enlist each beneficial owner of a company. Beneficial owners are supposedly those who own at least 25 percent of a company’s equities, but there are multiple murky exceptions to this rule that would put businesses at risk. For example, anyone who maintains “substantial control” of a company’s decisions or “substantial economic benefits” from a company’s actions are considered beneficial owners. Nobody knows what this means.

If an aspiring corporation fails to list somebody that might qualify as a beneficial owner, its applicant may be jailed for three years. Better yet, the Counter Terrorism and Illicit Finance Act doesn’t define who the government considers as a corporate applicant. There are multiple people, lawyers, businessmen, and consultants involved in the applicant process, each of whom may be vulnerable to imprisonment.

The point of enlisting beneficial owners is to unmask business donations to 501(c)(4) groups that spend money in political elections. Businesses that engage in wrongdoing, are subpoenaed, or are investigated by federal agencies could have their beneficial owners’ personal information released by FinCEN. This attaches names and faces to political donations.

Basically, the Counter Terrorism and Illicit Finance Act is a bad bill. It expands surveillance, stymies the application process for new corporations, and places protected private information in the hands of bureaucrats.

FreedomWorks strongly opposes the discussion draft entitled “The Counter Terrorism and Illicit Finance Act,” which is slated for discussion at a November 29, 2017 joint hearing between the Financial Institutions and Consumer Credit and the Terrorism and Illicit Finance subcommittees.

As we conclude this month that marked the sixteenth anniversary of September 11th, we must carry with us the lesson that the attack brought to our collective quest for freedom. Terrorism is a threat we all fear. While we must try to prevent American citizens from being murdered by terrorists, we must also guard against the eroding of our rights. The USA Patriot Act has most affected freedom at home. In memory of the victims of 9/11, we should consider the lessons that the attacks and the fallout taught us about the whimsical nature of freedom.

Perhaps the cocktails preceding yesterday's welcome dinner at the American Constitution Society's annual convention are to blame, but when Vice President Joe Biden and Sen. Elizabeth Warren addressed the dinner, they appeared to be suffering from memory problems. As they spoke about the Senate's handling of President Obama's judicial nominees and Donald Trump's remarks concerning a Mexican-American judge, their memory lapses were too numerous to discuss in a single post. But here are several examples:

After sometimes-dramatic and often-tense several weeks, the USA Freedom Act finally passed the Senate. The act’s passage brings the government’s telephone data surveillance program under Section 215 of the USA Patriot Act back from its brief retirement, but with reforms that stop its worst abuses. Although the USA Freedom Act was certainly not the level of reform that many had hoped for, it passage nevertheless sent a clear signal that the days of Congress simply rubber-stamping endless surveillance programs are over.

The Inspector General of the Federal Bureau of Investigation confirmed in a report released on Thursday that spying powers claimed under Section 215 of the USA PATRIOT Act has "not identified any major case developments" through the controversial statue. The report covers a three-year period between 2007 through 2009 and notes that the nation's top domestic law enforcement agency tripled its use of Section 215 requests beginning in 2004.

On Sunday, the Senate will vote on reauthorizing Section 215 of the Patriot Act, the controversial section that allows the bulk collection of telephone metadata. Actually, it doesn’t allow it, according to the 2nd Circuit Court of Appeals, but everyone is still acting like it does and framing the debate accordingly.

UPDATE: Senator Paul is standing firm on his promise to hold out for better surveillance reforms. Since Senator McConnell has thus far shown no indication that he will allow the amendment votes that Rand has asked for, there is a good chance that Section 215 of the Patriot Act will be allowed to expire Sunday night.

Yesterday, Senator Rand Paul proved yet again that he is dedicated to upholding the Constitution. For eleven hours, the Kentucky Senator claimed the senate floor to filibuster the reauthorization of the Patriot Act, which permits mass surveillance of American citizens. Warrantless spying and bulk data collection has been a massive infringement on our basic fourth amendment rights. Even 65% of American adults believe there are not adequate limits on the telephone and internet data that the government collects, according to a recent Pew poll.